Assume that the insured population attaches constant value to identical units of health gains measured in QALYS (quality-adjusted life years). However, the population seems to have a decreasing willingness to pay for each additional QALY, as a result of the diminishing marginal utility of income. The situation is described in the following table: Income Marginal utility of income (welfare units) (welfare Total utility (monetary units) units) 10 10 2 6. 19 8. 27 4. 34 6. 40 6. 45 7. 4. 49 8. 3 52 2. 54 10 55 The insured population requiring care from the health services falls into one of two groups (pathologies to treat): type A and type B patients, Let's assume that there is only one patient per group. So, there are patients of one type (A) with a disease that reduces their health status in 5

Assume that the insured population attaches constant value to identical units of health gains measured in QALYS (quality-adjusted life years). However, the population seems to have a decreasing willingness to pay for each additional QALY, as a result of the diminishing marginal utility of income. The situation is described in the following table: Income Marginal utility of income (welfare units) (welfare Total utility (monetary units) units) 10 10 2 6. 19 8. 27 4. 34 6. 40 6. 45 7. 4. 49 8. 3 52 2. 54 10 55 The insured population requiring care from the health services falls into one of two groups (pathologies to treat): type A and type B patients, Let's assume that there is only one patient per group. So, there are patients of one type (A) with a disease that reduces their health status in 5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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** PRACTICE TEST **
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